So it begins...

Hello all! Or, since this is my first post, hello to those of you who will eventually see this. My name is Matt, and for the past three years I have been buying and managing rental properties in my southeast Georgia town. It's gone pretty well for me so far and I have some big ideas but for now I'm in what we could call a formative phase. It's formative in the sense that I've only been actively investing for about three years and I can count all my properties on two hands. But I've learned enough in this short time to fill at least a small book (ok, a pamphlet) on some very important lessons learned. So how did I start? Rewind...back to 2008.

 I had just moved to Georgia from Germany as part of a military re-assignment. I had been very active in the stock market and had made some pretty good money from 2006-2008. It was so good that I was doing some pretty silly stuff; like day trading and taking big unnecessary risks with my hard earned money. I was bound to slip up eventually. Well, the market slipped for me and soon after arriving back in the states I saw my portfolio drop by tens of thousands of dollars.

Of course, I always had the option of waiting it out since the stocks would rebound eventually, right? And that's what I did. Month after painful month I watched my stocks fall, rise just enough to tease me, then fall even harder. By May of 2009 I'd had enough. I cashed it all out and decided to get into the real estate game! At least if my houses became worthless on paper I could go live in them.

I bought my personal residence when I got to Georgia and got my initial taste of "the game"; Not so much in regard to strategies, but simply in the buying process. You know those mortgage calculators that real estate agents love to put on their websites so mortgages can be estimated? Turns out that those are completely useless. What about the insurance and taxes? What if (like me) the house is in a flood zone and needs additional insurance? And what about the closing? I was getting a VA loan so I shouldn't have to come out of pocket for anything, right? Wrong! I still had to pay for the appraisal and home inspection which were upfront costs incurred before the closing. I was surprised again at the closing  when I was credited for the year's taxes by the seller but then made responsible for the entire amount at the end of the year. All of this, as it turns out, is fairly standard. But as a first timer there are so many charges that it becomes quite daunting to figure out what you're on the hook for. But there were some great lessons here and I paid good attention.

Later on, when I bought my first invstment property in May '09, I dusted off the old closing packet for my house. I was ready for the upfront costs this time but they didn't apply because I paid cash for it. As a finance major I should have known better. But I was so excited to have my first property that I just did it on the advice of my Realtor.

At this point I was on the right path because I was buying property but I was doing it wrong. I wasn't leveraging at all and was assuming all the risk for small returns. I was also using a Realtor who was giving me bad advice but whom I trusted. Plenty of lessons were learned but not until much later. Good thing they weren't fatal errors!

Well folks, that's it for now...an introduction...a teaser. Later on I'll talk about how I financed, re-financed, and manage my units. For now I've introduced myself and detailed (briefly) how I got into the real estate investment business. So far I've got my house and one property...and here are my lessons learned at this point:

1. Pay attention. Read those forms you're signing and know what they mean.

2. Get a good real estate agent who know's what they're talking about, preferably one with at least some college. Interview them and hold them accountable. They work for you!

3. Learn to estimate total upfront costs for purchases. This is much easier once you've done your first deal but your first deal includes the house you live in. Hold on to your HUD-1 statement and reference it to estimate closing costs for your next deal if you're financing it with a conventional loan.